everyone so quickly before I start because we usually have a diverse audience I know some people with you before but a lot of new people came who would be confident enough quick arrays of hands to explain locked into someone else yeah the OK maybe a 3rd not even at 4th

00:38

cool and what would be confident enough to explain the concept of the

00:42

smart contract to someone else OK same amount of people and decentralized autonomous organization OK so I'll bear with me the few people who already know the basics I would like to to give

00:56

the chance to the majority of the audience to catch up with the basics before we deep dive into an into their subject matter so why can we add disrupt organizations with blockchain and in order to understand this we need to understand the history of the Internet so if we look back and the 1st interation Internet uh early nineties revolutionize information and this is why we called it

01:25

the information data highway that was disruptive nobody would call it this way today but it doesn't make sense it's become normal about 10 years later and we have the so-called Web 2 and what the web to did it was like umm of the Internet became more mature more programmable and all of a sudden we had on the 1 hand social media platforms and on the other hand and the peer-to-peer economy and and the sharing economy

01:53

were the consumer and the producer came closer to each other on the information of opinion of goods and services as so we have it brought us is peer-to-peer economy but with this huge man in the middle of platform in the middle school started to control and all the data has control over all the data and from the dictates the rules of transactions of that platform so instead of the Internet becoming more decentralized

02:22

it became more centralized and if we think of block in the context of the Internet it is the driving technology behind the decentralized web or also called some call the web 3 blockchain allows real peer-to-peer transactions without a middleman and it all started with Bitcoin and money without banks still sending to people who don't know and do not trust each other sending money from to each other without a trusted 3rd party in the middle why is

02:54

that possible or why wasn't possible before and because we

03:00

1st at the computer and then we had the internet so since the nineties we started with the Internet with the TCP IP protocol or even before we started

03:09

connecting computers more and more 1st the big ones the small ones and and and the mobile phones and now we've reached an IUT Internet of Things and even though art are Wald is more and more connected data is still stored and centrally over this client server protocol where 1 computer source of nature and the other

03:32

computer asks or of a reader writes the data so data storage is locally

03:37

either on the computer and the device in device or the removable

03:43

device and also in in the cloud the cloud in the cloud it's remote but is still stored locally and this spring's 3 be problems or questions the question of data security the question of who owns my data and who had the rights to my data and who I can I trust the people will verify the transactions based on that data so it all boils down to 1 question of trust and and this is why the economy now 2 years ago

04:13

called the blocking the trust machine because wood block chain does it at it's a protocol that decentralizes trust and so were moving away from a system of today who were data is stored locally and on a server data monarchy you 2 and data democracies kind of set up and so today when I

04:38

send you money and I don't know who I don't know you I don't trust you would need a bank to verify that I am me and I have enough funds when I send you that money so it's not a blank check and I want to know that you actually

04:51

received the money so we need that bank bank in the middle at with Bitcoin for example or blocked in the peer-to-peer network copies of the same I'm a transaction data of who owned what and when the same copy of that transaction

05:07

data is stored on the peer-to-peer network instead of a central party very fine transactions instead of 1 single bank server verifying transactions the transactions verified peer-to-peer in a democratic way and by consensus and it's all done automatically the computers in the network do that automatically it's not people behind it it's machine consensus so this is highly disruptive

05:31

and this machine consensus allows us to have a peer-to-peer transactions without the men and the heart of this machine consensus is the smart contract and

05:42

so the smart contract is not really a legal contract yet as not very smart it's just

05:50

that piece of code running on top of the block chain that um codifies the rules of a transaction and when the rules of the transaction are met the transaction is automatically executed and that's and that's an n is that a highly disruptive because this reduces transaction costs of compliance and enforcement because compliance and enforcement happens on the fly so if you think of the test at chess game or a football game you always have rules of the game

06:24

you have a chessboard manager were sheets they stare at the referee in some and in some the football soccer out who makes sure that the players to a game

06:38

can only make moves according to the predefined rules and this is the function of a smart contract so instead of or as opposed to traditional contracts that are printed on paper and have signed by hand the smart contract and this is not a smart contract but it's a piece of code that is and and that is the um the with my private key which of course doesn't look like this but it's uh it looks like this it's based on cryptography and there is

07:12

some right so smart

07:17

contracts are not a good idea this thing

07:19

here and is a very primitive form of a smart contracts the roles of the transactions are also embedded into the machine and you need it if you don't trust a certain number and if you put enough money into the machine and you will get the product and and maybe also some some return money if you put too much money if you don't put enough money you don't get the product if you put

07:43

enough money but there is no product you get your money back that's a smart contracts the so what smart contracts do they this intermediate in a very radical ways

07:54

and allow us to have these peer-to-peer transactions we can have simple decentralized applications and we heard some for the ones who were uh listen to the talk before we had some interesting examples of what we can do with smart contracts basically we can

08:08

use smart contracts for any industry so it started with bitcoins money without banks sending money from a to B. but you can have apartment sharing without air be Indian women do you can have right sharing without over you can have a selling books

08:23

without Amazon et cetera and so you get rid of the PAC platforms through these

08:28

decentralized applications in the heart of those steps are smart contracts now the highest form of a smart contracts is a decentralized autonomous organization

08:42

and as smart contract can be very simple as of defining the rules of and for example sending money from a to B under which conditions if they're uh those of the 1 of the person who sends the money has more at least as much as money as they want to send and it's like simple if-then clauses and decentralized market and autonomous organizations are nothing else than very complex smart contracts that defined the bylaws of an organization for profit or not profit and into the smart contracts and so what you can get rid of bureaucracy and management overheads through smart contracts and there is another term the decentralized virtual borderless nation which basically is just a concept for a political this decentralized autonomous organization and but it's the same concept of the smart contract on the block chain and so what kind of DA always have we have so far and

09:51

if we look at the history of blockchain which is not very long but we we can say that the bitcoin really is the 1st decentralized autonomous organizations It's not only money without banks but it's also money without bank managers there is no central Bitcoin authorities so Bitcoin

10:11

was at the white paper was written by 1 person or a group of people we don't know what it was was put online 9 years ago was deployed eventually by a group of so after being programmed in an open source way eventually it was deployed after a few months by ad disparity group of programmers worldwide they deployed in the mind the 1st block and this is when Bitcoin started so there is no central Bitcoin authorities now we have stakeholders in the Bitcoin network we have the miners and we have and the exchanges and we have the wallet providers and we have the users etc. but there is no central authority there is not 1 person or 1 entity who can turn off Bitcoin you would need a power outage in the whole world to turn off the right or you need would need to turn off all the thousands of computers that are part of the peer-to-peer Bitcoin network to shut down Bitcoin and that's radical and and so what else what other examples that we had so far this is really

11:20

the longest lasting examples that we had at last year I don't know who heard about the doll and that attracted like 180 was a decentralized autonomous organization on the theory and network the perfect at the purpose of the Dow but it had a very generic name was to be in an investment fund for at the cerium based projects but completely decentralized the doubt token holders could vote proportionally to the tokens they had upon the project they wanted to invest in know the project had a few problems let's say and and stop what we've had before and after other Dallas uh

12:02

popping up another good example for a decentralized autonomous organization is Ethereum is also a blocked in that exists the that has existed for a few years and even though I have to stress that and the theory have the foundation and is in a way maybe more centralized and then at that point there is no central party that could take it

12:25

down but it has a very strong leadership that can influence opinion so what else then

12:33

we have the nation which is a start up and that aims to provide a kind of work press for a decentralized Dallas or

12:44

centralized virtual board snake nations out there working on making a platform where you can easily create and deploy your own DA or or a decentralized nation and I will

13:00

skip this so maybe it's very important to understand that this um technologies very early on and in its development it's kind of like 1990 when it comes to the internet it's more less 1960 when it comes to hardware because the blockchain especially the theory of watching and its you could see how you could say that it's like a decentralized world computer it's a distributed network of computers is a peer-to-peer

13:31

network that peer-to-peer network of computers is the distributed world computer the protocol could be seen as like them an operating system where you can now run decentralized applications of smart contracts on top of it so we're reinventing not only the internet

13:50

but also the computer and block chain is only 1 of many protocols in that sense OK so now let's look at disrupting organizations and we've heard

14:02

that in the previous talk let's go a bit into more detail so if we look at organizations we know today whether the political or and economical they're very much organized in this hierarchical top-down way and executed also in this way and know what this is

14:23

an that I think I need some Tekalp

14:28

and OK I have to improvise now so on organizations have been

14:35

traditionally organized in a top-down way and blockchain allows us to some disrupt or get rid of a lot of bureaucracy smart contracts and the protocols that are machine consensus that this autumn enforceable can now define the rules of an organization's into auto enforceable cold and this way we can get rid of all managers but we can get rid of a lot of bureaucracy whether in private organizations or in public organizations and and even though this technologies in the very early stages and it has the potential to really disrupt the way we organize societies if you look at that point it has a market capitalization on of the more than but a lot of small nations out there and and is completely run the centrally and OK I'm waiting for so I have to so on 1 hand it

15:38

we look like we did on the political side let's look what we had before we had and like for example we had the king is ruling out a very the dictatorship is very top down and when we started and to have democracy the idea was to be to allow people to participate in the consensus process the problem with big societies is that not

16:06

everyone and it's inefficient for everyone to take part in every decision making process and this is why the forms of democracy that we have nowadays are representative democracy these institutionalized representative democracies are in a way very hierarchical we have and as we as citizens we can vote every 3 years and or every 4 years sometimes every 5 years but in between we have very little power over what those representatives do we cannot revoke that power with very limited means in most cases and now government entities are trust that the parties and in a way and we have seen over the last decades and you can't that sets as liquid democracy for example pop or social cost the etc. The problem with those concepts even though there may be more practical the transaction costs in the analog worse than my digital world are too high and would block chain with machine consensus for the 1st

17:10

time we're in a situation where we could we could make concepts like liquid democracy on 1 hand or whole okresie on the other hand when it comes to organizations happen in a much more efficient way and

17:26

um yes so I don't have my slides and I guess the any questions so far usually

17:40

my slides are like kind of my yes OK I think it's a good time to to go for the kidney so I'm sure there are are a couple of questions I constituents and looking as that was the you I as over interesting talk on my question is about defining the of smart contracts because in my opinion a promise the often finding just the right way to specify the contract in all of that like the correct incentives and there are still many different things that can go wrong with that you might not think when designing such a complicated

18:21

that's a family that unless you yeah that this actually my last slide I completely forgot so thanks for the question and so smart contracts for machine consensus is very efficient when we have in the cases of no nodes and known unknowns when we can exactly predict what will happen it's easy to to put that into code and to reduce transaction costs smart or a block chains are really lousy when it comes to dealing with unknown unknowns because of this we cannot

18:59

enforce situations as those unknown unknowns and I we have 2 examples for example in the Bitcoin community for 2 years now uh or maybe before uh let's go so when set to achieve in initially designed uh or defined in as white paper of the Bitcoin blockchain he assumes that you would have individual miners individual computers running and other the code on their individual computers and for the 1st few years everybody was running people were participating in the Bitcoin blockchain they could run it on their home computers right you needed a powerful computer but you could do that and eventually

19:41

and that of the difficulty roles and you needed even more powerful computers and wanted to she did not predict when designing the cold was or some of that so that Myers would start to collaborate so collaborative game theory was not the basis of his map that he did he use simple game theory and so what we're seeing now in the

20:06

Bitcoin community is that and miners have colluded to mining tools and now I would say around 3 to 4 mining tools are and the currently dominating around have a half of the bitcoin network and most of them are in China so it's still too much more decentralized than a centralized banks but it's not as decentralized as subtle she originally envisioned another example in the Bitcoin blockchain infer would you just said is that when conditions change for example there's the block size debate for 2 years without the block size debate going on in and in Bitcoin and the community is a or has been on the brink of secession several times and very divided over how to solve this problem of Bitcoin scalability so now this is very technical but what I'm trying to say is that an other enforceable cold is very efficient as long as everybody agrees that this is the way to do it and the moment that you need to upgrade the

21:12

cold because conditions have changed we still need and some kind of governance and we don't have those governance structures so this is something with that

21:22

we still need to work on any other questions and as it the internet might

21:30

think this is a question here know if I have a few of my question is if you look ahead for the next 5 years on what kind of organizations will turn into Dallas uh I was thinking that maybe consultancies might be like because of its network if you don't have anything could really we have made out of anything really and I

21:54

think the thing is that will be Dell's um in the future and it would make sense to to start with less at time or money critical things like that Dow last year and the people who created the code for the Dow that

22:11

decentralized investment funds really didn't envision that 180 million US dollars would be invested into that right but they didn't put a cap on it so I think because the technology is still in the early stages of better since we can use it for any kind of use case let's start with the nonessential

22:28

non-critical things because it's still very experimental technology and and the block chain is I would say not only a technological revolution but 1st and foremost as social economic revolution in order to block chain is a tool to bring us into a more decentralized world but we need the software for this decentralized worthy in our brains and how we interact as people and I would doubts that we already have that and we could see that with the Dow what now with the theory of now with Bitcoin and you can see that even tho we all long for a more decentralized world we we have been socialized very top-down structures in a way so there is a gap between where we want to be and we were we can be as a society because we don't have the soft tools yeah and

23:22

can I can I can think of a question of the family

23:25

have come to you and then 1 more here and I think that I will have to close the question and answers because then we are running out of time but 2 questions I want please introduce yourself and then the question yeah yeah hello my name is Lawrence and them you were talking about that the block chain is very decentralized and since we are witnessing now some sort of a centralization with the big players like Google and Facebook um do

23:58

you think in the long run this might have an effect on the internet that is going to be a decentralized again even in cultural terms only a small thing in this is the claim of the block you that claim of Bitcoin was money without banks and countries without politicians and and and companies without managers and and also disrupt the disruptors and for the other chain is the degree let's read

24:25

decentralize the internet so the original vision of the Internet was to be at this centralized world where they could but could put information online but in the Web 2 it became very centralized that those

24:37

platforms and partly because our data structures and this is what I try to explain are very centralized because we 1st at the computer and then we had the internet so when we started to have the internet

24:50

we took over those centralized data structures um and what we're doing now with blockchain and I PFS and all these other technologies of the 2 D central where we're redesigning data structures given the fact that we are already living in the connected world and so by that we hope and that

25:11

is the aim of the Web 3 to live in a more decentralized world in the future but there are many many stumbling blocks to that 1 is the problem of the unknown unknowns and the limitations of smart contracts and what they can or to enforce so we need distributed kind of dispute derivative resolution systems at what do we do when those

25:31

unknown unknowns occur we knew be resolution we need some kind of and governance mechanisms that we don't have yet that's on 1 hand and on yeah and on the other hand what was the question again it it caring

25:52

phorylated question again I see if I understood correctly because his questions his question was more like on the 1 hand the Internet becoming wasn't yes little wouldn't it is becoming more de-centralized 1 of the problems that

26:08

we are also seeing now is that even though we want to create a more decentralized what the world blockchain state of the art block chains are based on plutocratic governance rules the more tokens you have the more power you have or the more hashing power you have the more mining power you have the more decision power you have in the network and so what we're doing state of the art block chains are actually making the discrepancies of the poor and the rich figure on channel so as long as we don't to move to more democratic voting structures and decision structures of chain on change and I think we might not up and decentralization might be um more theory than

26:57

reality so we have to be careful about that we have 1 last mission is that possible I have with a with you saying that like pretty much in the sixties self like the 3rd revolution of the Internet whatever Internet is on how what's your feeling towards some blockchain as a concept that

27:19

as technology or as a basic basis for small contracts and con technologies that can be built on that on the concept of isn't something that you might

27:30

say something that's like an easy thing means what right now it's quite tough to understand the concept and there are only few people could

27:37

actually you with the technology itself so what is your feeling towards that how how can how can watch evolving the technology and the way we deal with that evolve in a way that actually have enough people can deal with that and set of rules and end finally maybe code becomes smart contracts and that's I think it's a really boils down to the matter of time so basically when it

28:00

comes on application level where like early nineties were an e-mail was the 1st application of the Internet and for those who were old enough to remember and I use e-mail when I was 20 the 1st time so for me that was the Internet that was even before the World Wide Web and and I didn't envision Facebook or Twitter anything

28:24

and I think and nobody did in that way and so um and um I was 1 of the early adopters so I think what we need to have been coined now really is the 1st killer application of blockchain and we haven't had another killer application so I think in terms of usability and scalability in the next 2 or 3 years we might say have the 1st step killer application where my grandmother can also use it and once we have that I think blockchain will really take off on 1 hand and block blockchain a lot of use cases of block build a network effects but when it comes to accounting when it comes to supply chain Internet of Things etc. so we're not there yet so I think yeah we need another 5 to 10 years and for those use cases where we need extreme network effects we need another 5 to 10 years and hopefully the 1st killer application in

29:22

the next 3 years you might on the view that you think you used in some

29:30

you can just say here we have the last flight of running so our blockchain as there is a deep topic you can

29:42

find a lot of information on a website or follow us on social media than the

Inhaltliche Metadaten

Blockchain is the driving force of the next generation Internet, also referred to as the Decentralized Web. It allows us to decentralise trust. Smart contracts on the Blockchain radically reducing transaction costs creating the basis for a P2P society, allowing for new forms of organisational structures that were not feasible before. What is the state of that technology and what are the pitfalls and challenges of Blockchain based DAOs (Decentralized Autonomous Organizations)?